Thar she blows!!! Following days of consolidation at elevated levels, bitcoin prices finally broke through resistance in the 259 to 262 $ area. Price hit a local high of 268.10 $ early this morning, but has since pulled back to prior resistance (now support) around 263 $. Ideally, for the bullish scenario at least, we would like to see price calm down here and consolidate at current levels prior to moving higher to the next heavy resistance area from 275 $ to 288 $.

Given buy volumes, price action, and the longer term technicals we think the rally still has some room left to run to the upside (280-300 $), however we want to wait and see if we get a pull back to support in the 245 to 250 $ zone before getting long on a ProTrade. That said, risk seekers can get long around the 262 $ level for a move to retest the local highs around 268 $ with a tight stop around 259 $.

Additionally, with low liquidity caused by a holiday shortened week (and summer trading environment), uncertainty surrounding Greece and the Eurozone, and short term overbought technical conditions we think it best to remain on the sidelines until either July 4th has passed and support has held, OR support breaks and we can catch a long on a panic dump. Otherwise, we expect price to consolidate gains through the long weekend in the 255 $ to 265 $ range, which we do not want to trade as it is a return to the market maker chopzone.

As expected, bitcoin prices have stabilized somewhat following what became a sentiment-driven rally top at 269 $. Shortly after issuing our update yesterday the market did indeed move back to retest that high, so if you would have taken our “risky” trade recommendation you would have made a quick ~6 $ on the scalp. Today we find ourselves hovering around initial support following the bull failure at 270 $, but we would like to see more consolidation before hopping back in on the long side.

While the longer term charts remain very bullish, the medium term ones are overbought which is typical in bull markets (if, in fact, that is what we are now entering). That leaves us to rely more heavily on the short term than we would prefer, but at least we have a decent directional bias to work off of for the first time in months (feels like years).

The hourly chart provides us with a good look at the setup. First thing to note is the divergent double top at 269 $ within a head and shoulders that foretold lower prices. We can see that the market is now finding support right at the previous supply zone (resistance becomes support) and volume profile notch around 252 $, but we still do not want to buy this quite yet. What we want to see is price move down into the OTE long zone off of the 239 $ rally low, which is also where the rally trendline lies, a huge VP notch sits, and would washout stops below the 247.25 $ local low. A stop run to the downside would also send Willy and the Stochastic into very oversold territory while at the same time A/D continues to show steady accumulation of coins through this pullback.

We must admit that price action and order flow has been very bullish over the past few days therefore we would not be surprised to see the top of our resistance zone in the 280’s $ tested in the not too distant future. In fact, 300 $ might have a technical bullseye on it as it is now a confluence zone and is important as a psychological round number. Lets wait and see how this consolidation plays out, but stay long if you are long and look to get long if you are not (as per the trade below).

Bitcoin remains in a rangebound consolidation between 250 and 265 $ as we approach a bank holiday/long holiday in the US for the 4th of July. While we expect some volatility today with a slew of economic data being released, including NFP, we think price will remain stuck between the supply and demand zones denoted on the hourly chart below until Sunday. If we do temporarily breakout of this range over the next three days, then we expect it to be a false break to the downside that we will use as an opportunity to enter our long ProTrade down in the 245 $ region.

Technically speaking nothing has changed from yesterday other than a turn in the short term momentum indicators which are signaling a retest of the top of the range around 262 $, but we expect price to selloff once again prior to a breakout in order to trap bears on a fakeout down to our support/buy zone (hence the ProTrade).

Longer term we remain cautiously optimistic on a potential bullish trend change, but are still not yet ready to call a definitive cycle bottom at 166.45 $ due to an unresolved LT Elliot Wave pattern. It would not surprise us one bit to see this rally continue up well past 300 $ only to selloff sharply once euphoria hits in order to slaughter the bulls one last time before its all said and done. This is not a call, it is a possibility, but we wanted you to be aware of it if you are going to trade the action this weekend.

Unfortunately, price was not able to make it down into our ProTrade buy area over the weekend as the “No” vote in the Greek referendum created more uncertainty about the future of the EU. Investors continue to speculate as to whether an official Grexit will lead to more currency volatility, capital controls, and perhaps an exodus from the Euro althogether by other PIGS nations. While we think this chain of events would be very good for the bitcoin bulls, we think this process will take more than a few days, while at the same time that the charts are showing some serious resistance immediately overhead.

Turning to the hourly chart we can see that following a nice saucer bottom around 252 $, price broke out above the previous supply zone to the upside on good volume. SCMR is now showing that the old resistance area is now support around at the 267 $ level. Despite this ST support, the momentum indicators are telling us that at least a sideways consolidation is needed to recharge, if not an outright selloff down to stronger support levels around the 250 to 260 $ area. Additionally, price is approaching the 1.382 Fib extension off of the previous up leg, which will provide near term resistance, as well as the top of the longer term daily OTE short zone which comes in around 285 $. If you are long, this is where we would be taking profits in order to get some dry powder ready for the pullback.

If you have not been in a position during this move, we think this week will provide an opportunity to get back in at lower levels than we currently sit. the 250 to 260 $ range is what we are now watching as this would allow the ST indicators to get cleaned up while still holding above the 100 and 200 day MA’s. It is also the OTE long sweet spot off of the weekend rally. That said, if it appears as though all we will get another shallow retracement before the next move up, then we will issue a quick ProTrade update to adjust the entry levels higher. If not, and the market does what we think it will, then we want to stay patient and wait for price to come to us.